Exhibit 10.6
FORM OF
CORPORATE AGREEMENT
THIS CORPORATE AGREEMENT ("Agreement") is entered into as of
[______], 1996 by and between Abercrombie & Fitch Co., a Delaware corporation
("Abercrombie & Fitch"), and The Limited, Inc., a Delaware corporation ("The
Limited").
RECITALS
WHEREAS, The Limited beneficially owns all of the issued and
outstanding Abercrombie & Fitch Class B Common Stock, par value $0.01 per
share ("Class B Common Stock"), and Abercrombie & Fitch is a member of The
Limited's "affiliated group" of corporations ("Limited Group") for federal
income tax purposes;
WHEREAS, Abercrombie & Fitch issued shares of Class A Common Stock,
$0.01 par value per share ("Class A Common Stock"), to the public in an
offering (the "Initial Public Offering") registered under the Securities Act
of 1933, as amended; and
WHEREAS, the parties desire to enter into this Agreement to set forth
their agreement regarding (i) The Limited's rights to purchase additional
shares of Class B Common Stock upon any issuance of certain classes of capital
stock of Abercrombie & Fitch to any person to permit The Limited to maintain
its then current percentage ownership interest in Abercrombie & Fitch, (ii)
The Limited's rights to purchase shares of non-voting classes of capital stock
of Abercrombie & Fitch to permit The Limited to own 80 percent of each class
of such stock outstanding, (iii) certain registration rights with respect to
Class B Common Stock (and any other securities issued in respect thereof or in
exchange therefor) and (iv) certain representations, warranties, covenants and
agreements applicable to Abercrombie & Fitch so long as it is a subsidiary of
The Limited.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, The Limited and
Abercrombie & Fitch, for themselves, their successors and assigns, hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms
will have the following meanings, applicable both to the singular and the
plural forms of the terms described:
"Abercrombie & Fitch" has the meaning ascribed thereto in the
preamble hereto.
"Abercrombie & Fitch Entities" means Abercrombie & Fitch and its
Subsidiaries and "Abercrombie & Fitch Entity" shall mean any of the
Abercrombie & Fitch Entities.
"Affiliate" means, with respect to any Person, any Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to vote a
majority of the securities having voting power for the election of directors
(or other Persons acting in similar capacities) of such Person or otherwise to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning ascribed thereto in the preamble hereto,
as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Applicable Stock" means at any time the (i) shares of Class B Common
Stock owned by the Limited Entities that were owned on the date hereof, plus
(ii) shares of Class B Common Stock owned by the Limited Entities that were
purchased by the Limited Entities pursuant to Article II of this Agreement,
plus (iii) shares of Common Stock that were issued to the Limited Entities in
respect of shares described in either clause (i) or clause (ii) in any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event.
"Class A Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Class B Common Stock Option" has the meaning ascribed thereto in
Section 2.1(a).
"Class B Common Stock Option Notice" has the meaning ascribed thereto
in Section 2.2.
"Common Stock" means the Class B Common Stock, the Class A Common
Stock, any other class of Abercrombie & Fitch capital stock having the right
to vote generally for the election of directors and, for so long as
Abercrombie & Fitch continues to be a subsidiary corporation includible in a
consolidated federal income tax return of the Limited Group, any other
security of Abercrombie & Fitch treated as stock for purposes of Section 1504
of the Internal Revenue Code of 1986, as amended.
"Company Securities" has the meaning ascribed thereto in Section
3.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto in
Section 3.1(a).
"Holder" means The Limited and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section
3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in the
recitals to this Agreement.
"Initial Public Offering Date" means the date of completion of the
initial sale of Class A Common Stock in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section 2.2.
"Issuance Event Date" has the meaning ascribed thereto in Section 2.2.
"Limited Entities" means The Limited and Subsidiaries of The Limited
and "Limited Entity" shall mean any of the Limited Entities.
"Limited Group" has the meaning ascribed thereto in the recitals to
this Agreement.
"Limited Ownership Reduction" means any decrease at any time in the
Ownership Percentage to less than 50%.
"Limited Transferee" has the meaning ascribed thereto in Section 3.9.
"Market Price" of any shares of Class A Common Stock on any date
means (i) the average of the last sale price of such shares on each of the
five trading days immediately preceding such date on the Nasdaq National
Market or, if such shares are not quoted thereon, on the principal national
securities exchange or automated interdealer quotation system on which such
shares are traded or (ii) if such sale prices are unavailable or such shares
are not so traded, the value of such shares on such date determined in
accordance with agreed-upon procedures reasonably satisfactory to Abercrombie
& Fitch and The Limited.
"Nonvoting Stock" means any class of Abercrombie & Fitch capital
stock not having the right to vote generally for the election of directors.
"Nonvoting Stock Option" has the meaning ascribed thereto in Section
2.1(b).
"Nonvoting Stock Option Notice" has the meaning ascribed thereto in
Section 2.2.
"Other Holders" has the meaning ascribed thereto in Section 3.2(c).
"Other Securities" has the meaning ascribed thereto in Section 3.2.
"Ownership Percentage" means, at any time, the fraction, expressed as
a percentage and rounded to the next highest thousandth of a percent, whose
numerator is the aggregate Value of the Applicable Stock and whose denominator
is the sum of the aggregate Value of the then outstanding shares of Common
Stock of Abercrombie & Fitch plus Repurchased Shares; provided, however, that
any shares of Common Stock issued by Abercrombie & Fitch in violation of its
obligations under Article II of this Agreement shall not be deemed outstanding
for the purpose of determining the Ownership Percentage. For purposes of this
definition and the definition of Repurchased Shares, "Value" means, with
respect to any share of stock, the value of such share determined by The
Limited under principles applicable for purposes of Section 1504 of the
Internal Revenue Code of 1986, as amended.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.
"Registrable Securities" means Class B Common Stock and any stock or
other securities into which or for which such Class B Common Stock may
hereafter be changed, converted or exchanged and any other shares or
securities issued to Holders of such Class B Common Stock (or such shares or
other securities into which or for which such shares are so changed, converted
or exchanged) upon any reclassification, share combination, share subdivision,
share dividend, share exchange, merger, consolidation or similar transaction
or event or pursuant to the Nonvoting Stock Option. As to any particular
Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public in accordance with Rule 144, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
further transfer shall have been delivered by Abercrombie & Fitch and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any state securities or blue sky law then
in effect or (iv) they shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article III, including, without limitation, (i) the fees, disbursements and
expenses of Abercrombie & Fitch's counsel and accountants and the reasonable
fees and expenses of counsel selected by the Holders in accordance with this
Agreement in connection with the registration of the securities to be disposed
of; (ii) all expenses, including filing fees, in connection with the
preparation, printing and filing of the registration statement, any
preliminary prospectus or final prospectus, any other offering document and
amendments and supplements thereto and the mailing and delivering of copies
thereof to any underwriters and dealers; (iii) the cost of printing or
producing any agreements among underwriters, underwriting agreements, and blue
sky or legal investment memoranda, any selling agreements and any other
documents in connection with the offering, sale or delivery of the securities
to be disposed of; (iv) all expenses in connection with the qualification of
the securities to be disposed of for offering and sale under state securities
laws, including the fees and disbursements of counsel for the underwriters or
the Holders of securities in connection with such qualification and in
connection with any blue sky and legal investment surveys; (v) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (vi) transfer agents' and registrars' fees and expenses and the
fees and expenses of any other agent or trustee appointed in connection with
such offering; (vii) all security engraving and security printing expenses;
(viii) all fees and expenses payable in connection with the listing of the
securities on any securities exchange or automated interdealer quotation
system or the rating of such securities; (ix) any other fees and
disbursements of underwriters customarily paid by the issuers of
securities, but excluding underwriting discounts and commissions and
transfer taxes, if any; and (x) other reasonable out-of-pocket expenses of
Holders other than legal fees and expenses referred to in clause (i) and
(iv) above.
"Repurchased Shares" mean the aggregate Value of shares of
Abercrombie & Fitch's Common Stock that are, from and after the date hereof,
repurchased by Abercrombie & Fitch from its shareholders, less the aggregate
Value of shares of Common Stock (up to the aggregate Value so repurchased)
that are re-issued from and after the date hereof upon the exercise of stock
options or otherwise.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous
basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Selling Holder" has the meaning ascribed thereto in Section 3.5(e).
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof.
"The Limited" has the meaning ascribed thereto in the preamble hereto.
"Transferee" has the meaning ascribed thereto in Section 3.9.
1.2. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
ARTICLE II
OPTIONS
2.1. Options. (a) Abercrombie & Fitch hereby grants to The
Limited, on the terms and conditions set forth herein, a continuing right (the
"Class B Common Stock Option") to purchase from Abercrombie & Fitch, at the
times set forth herein, such number of shares of Class B Common Stock as is
necessary to allow the Limited Entities to maintain the then-current Ownership
Percentage. The Class B Common Stock Option shall be assignable, in whole or
in part and from time to time, by The Limited to any Limited Entity. The
exercise price for the shares of Class B Common Stock purchased pursuant to
the Class B Common Stock Option shall be the Market Price of the Class A Common
Stock as of the date of first delivery of notice of exercise of the Class B
Common Stock Option by The Limited (or its permitted assignee hereunder) to
Abercrombie & Fitch.
(b) Abercrombie & Fitch hereby grants to The Limited, on the terms
and conditions set forth herein, a continuing right (the "Nonvoting Stock
Option" and, together with the Class B Common Stock Option, the "Options") to
purchase from Abercrombie & Fitch, at the times set forth herein, such number
of shares of Nonvoting Stock as is necessary to allow the Limited Entities to
own 80 percent of each class of outstanding Nonvoting Stock. The Nonvoting
Stock Option shall be assignable, in whole or in part and from time to time,
by The Limited to any Limited Entity. The exercise price for the shares of
Nonvoting Stock purchased pursuant to the Nonvoting Stock Option shall be the
price at which such Nonvoting Stock is then being sold to third parties or, if
no Nonvoting Stock is being sold, the fair market value thereof as determined
in good faith by the Board of Directors of Abercrombie & Fitch.
2.2. Notice. At least 20 business days prior to the issuance of any
shares of Common Stock or the first date on which any event could occur that,
in the absence of a full or partial exercise of the Class B Common Stock
Option, would result in a reduction in the Ownership Percentage, Abercrombie &
Fitch will notify The Limited in writing (a "Class B Common Stock Option
Notice") of any plans it has to issue such shares or the date on which such
event could first occur. At least 20 business days prior to the issuance of
any shares of Nonvoting Stock or the first date on which any event could occur
that, in the absence of a full or partial exercise of the Nonvoting Stock
Option, would result in the Limited Entities owning less than 80 percent of
each class of outstanding Nonvoting Stock, Abercrombie & Fitch will notify The
Limited in writing (a "Nonvoting Stock Option Notice" and, together with a
Class B Common Stock Option, an "Option Notice") of any plans it has to issue
such shares or the date on which such event could first occur. Each Option
Notice must specify the date on which Abercrombie & Fitch intends to issue
such additional shares or on which such event could first occur (such issuance
or event being referred to herein as an "Issuance Event" and the date of such
issuance or event as an "Issuance Event Date"), the number of shares
Abercrombie & Fitch intends to issue or may issue and the other terms and
conditions of such Issuance Event.
2.3. Option Exercise and Payment. The Class B Common Stock Option
may be exercised by The Limited (or any Limited Entity to which all or any
part of the Class B Common Stock Option has been assigned) for a number of
shares equal to or less than the number of shares that are necessary for the
Limited Entities to maintain, in the aggregate, the Ownership Percentage. The
Nonvoting Stock Option may be exercised by The Limited (or any Limited Entity
to which all or any part of the Nonvoting Stock Option has been assigned) for
a number of shares equal to or less than the number of shares that are
necessary for the Limited Entities to own, in the aggregate, 80% of each class
of outstanding Nonvoting Stock. Each Option may be exercised at any time
after receipt of an applicable Option Notice and prior to the applicable
Issuance Event Date by the delivery to Abercrombie & Fitch of a written notice
to such effect specifying (i) the number of shares of Class B Common Stock or
Nonvoting Stock (as the case may be) to be purchased by The Limited, or any of
the Limited Entities, and (ii) a calculation of the exercise price for such
shares. Upon any such exercise of either Option, Abercrombie & Fitch will,
simultaneously with the issuance of Class B Common Stock, Class A Common Stock
or Nonvoting Stock in connection with an Issuance Event, deliver to The Limited
(or any Limited Entity designated by The Limited), against payment therefor,
certificates (issued in the name of The Limited or its permitted assignee
hereunder, or as directed by The Limited) representing the shares of Class B
Common Stock or Nonvoting Stock (as the case may be) being purchased upon such
exercise. Payment for such shares shall be made by wire transfer or intrabank
transfer to such account as shall be specified by Abercrombie & Fitch, for the
full purchase price for such shares.
2.4. Effect of Failure to Exercise. Any failure by The Limited to
exercise either Option, or any exercise for less than all shares purchasable
under either Option, in connection with any particular Issuance Event shall
not affect The Limited's right to exercise the relevant Option in connection
with any subsequent Issuance Event; provided, however, that, in the case of
the Class B Common Stock Option, the Ownership Percentage following such
Issuance Event in connection with which The Limited so failed to exercise such
Option in full or in part shall be recalculated as set forth in Section 1.1.
2.5. Initial Public Offering. Notwithstanding the foregoing, The
Limited shall not be entitled to exercise the Class B Common Stock Option in
connection with the Initial Public Offering of the Class A Common Stock.
2.6. Termination of Options. The Options shall terminate upon the
occurrence of the first Issuance Event that results in the Ownership
Percentage being less than 60%, other than any Issuance Event in violation of
this Agreement. Each Option, or any portion thereof assigned to any Limited
Entity other than The Limited, also shall terminate in the event that the
Person to whom such Option, or such portion thereof has been transferred,
ceases to be a Limited Entity for any reason whatsoever.
ARTICLE III
REGISTRATION RIGHTS
3.1. Demand Registration - Registrable Securities. (a) Upon
written notice provided at any time after the Initial Public Offering Date
from any Holder of Registrable Securities requesting that Abercrombie & Fitch
effect the registration under the Securities Act of any or all of the
Registrable Securities held by such Holder, which notice shall specify the
intended method or methods of disposition of such Registrable Securities,
Abercrombie & Fitch shall use its best efforts to effect the registration
under the Securities Act and applicable state securities laws of such
Registrable Securities for disposition in accordance with the intended method
or methods of disposition stated in such request (including in a Rule 415
Offering, if Abercrombie & Fitch is then eligible to register such Registrable
Securities on Form S-3 (or a successor form) for such offering); provided that:
(i) with respect to any registration statement filed, or to be
filed, pursuant to this Section 3.1, if Abercrombie & Fitch shall
furnish to the Holders of Registrable Securities that have made such
request a certified resolution of the Board of Directors of
Abercrombie & Fitch (adopted by the affirmative vote of a majority of
the directors not designated by the Limited Entities) stating that in
the Board of Directors' good faith judgment it would (because of the
existence of, or in anticipation of, any acquisition or financing
activity, or the unavailability for reasons beyond Abercrombie &
Fitch's reasonable control of any required financial statements, or
any other event or condition of similar significance to Abercrombie &
Fitch) be significantly disadvantageous (a "Disadvantageous
Condition") to Abercrombie & Fitch for such a registration statement
to be maintained effective, or to be filed and become effective, and
setting forth the general reasons for such judgment, Abercrombie &
Fitch shall be entitled to cause such registration statement to be
withdrawn and the effectiveness of such registration statement
terminated, or, in the event no registration statement has yet been
filed, shall be entitled not to file any such registration statement,
until such Disadvantageous Condition no longer exists (notice of
which Abercrombie & Fitch shall promptly deliver to such Holders).
Upon receipt of any such notice of a Disadvantageous Condition, such
Holders shall forthwith discontinue use of the prospectus contained
in such registration statement and, if so directed by Abercrombie &
Fitch, each such Holder will deliver to Abercrombie & Fitch all
copies, other than permanent file copies then in such Holder's
possession, of the prospectus then covering such Registrable
Securities current at the time of receipt of such notice; provided,
that the filing of any such registration statement may not be delayed
for a period in excess of six months due to the occurrence of any
particular Disadvantageous Condition;
(ii) after the occurrence of the Limited Ownership Reduction, if
any, the Holders of Registrable Securities may collectively exercise
their rights under this Section 3.1 on not more than three occasions
(it being acknowledged that prior to the Limited Ownership Reduction,
if any, there shall be no limit to the number of occasions on which
such Holders (other than any of the Limited Transferees and their
Affiliates (other than the Limited Entities)) may exercise such
rights); and
(iii) the Holders of Registrable Securities shall not have the
right to exercise registration rights pursuant to this Section 3.1 in
any six-month period following the registration and sale of
Registrable Securities effected pursuant to a prior exercise of the
registration rights provided in this Section 3.1.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 3.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it
has become effective, (ii) if after it has become effective such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the
related registration statement or (iii) if the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied or waived other than by reason of
some act or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section 3.1
shall involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall have the right
to designate an underwriter or underwriters as the lead or managing
underwriters of such underwritten offering reasonably acceptable to
Abercrombie & Fitch and, in connection with each registration pursuant to this
Section 3.1, such Holders may select one counsel to represent all such Holders.
(d) Abercrombie & Fitch shall have the right to cause the
registration of additional equity securities for sale for the account of any
Person (including, without limitation, Abercrombie & Fitch and any existing or
former directors, officers or employees of the Abercrombie & Fitch Entities)
in any registration of Registrable Securities requested by the Holders
pursuant to paragraph (a) above; provided, that if such Holders are advised in
writing (with a copy to Abercrombie & Fitch) by a nationally recognized
investment banking firm selected by such Holders reasonably acceptable to
Abercrombie & Fitch (which shall be the lead underwriter or a managing
underwriter in the case of an underwritten offering) that, in such firm's good
faith view, all or a part of such additional equity securities cannot be sold
and the inclusion of such additional equity securities in such registration
would be likely to have an adverse effect on the price, timing or distribution
of the offering and sale of the Registrable Securities then contemplated by any
Holder, the registration of such additional equity securities or part thereof
shall not be permitted. The Holders of the Registrable Securities to be
offered may require that any such additional equity securities be included in
the offering proposed by such Holders on the same conditions as the
Registrable Securities that are included therein. In the event that the
number of Registrable Securities requested to be included in a registration
statement by the Holders thereof exceeds the number which, in the good faith
view of such investment banking firm, can be sold without adversely affecting
the price, timing, distribution or sale of securities in the offering, the
number shall be allocated pro rata among the requesting Holders on the basis
of the relative number of Registrable Securities then held by each such Holder
(provided that any number in excess of a Holder's request may be reallocated
among the remaining requesting Holders in a like manner).
3.2. Piggyback Registration. In the event that Abercrombie & Fitch
at any time after the Initial Public Offering Date proposes to register any of
its Common Stock, any other of its equity securities or securities convertible
into or exchangeable for its equity securities (collectively, including Common
Stock, "Other Securities") under the Securities Act, whether or not for sale
for its own account, in a manner that would permit registration of
Registerable Securities for sale for cash to the public under the Securities
Act, it shall at each such time give prompt written notice to each Holder of
Registrable Securities of its intention to do so and of the rights of such
Holder under this Section 3.2. Subject to the terms and conditions hereof,
such notice shall offer each such Holder the opportunity to include in such
registration statement such number of Registerable Securities as such Holder
may request. Upon the written request of any such Holder made within 15 days
after the receipt of Abercrombie & Fitch's notice (which request shall specify
the number of Registrable Securities intended to be disposed of and the
intended method of disposition thereof), Abercrombie & Fitch shall use its
best efforts to effect, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which Abercrombie & Fitch has been so requested to register, to the
extent required to permit the disposition (in accordance with such intended
methods thereof) of the Registrable Securities so requested to be registered;
provided, that:
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration,
Abercrombie & Fitch shall determine for any reason not to register the Other
Securities, Abercrombie & Fitch may, at its election, give written notice of
such determination to such Holders and thereupon Abercrombie & Fitch shall be
relieved of its obligation to register such Registrable Securities in
connection with the registration of such Other Securities, without prejudice,
however, to the rights of the Holders of Registrable Securities immediately to
request that such registration be effected as a registration under Section 3.1
to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of
this Section 3.2 is to be an underwritten registration on behalf of
Abercrombie & Fitch, and a nationally recognized investment banking firm
selected by Abercrombie & Fitch advises Abercrombie & Fitch in writing that,
in such firm's good faith view, the inclusion of all or a part of such
Registrable Securities in such registration would be likely to have an adverse
effect upon the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, Abercrombie & Fitch shall include in such
registration: (i) first, all Other Securities Abercrombie & Fitch proposes to
sell for its own account ("Company Securities"), (ii) second, up to the full
number of Registrable Securities held by Holders constituting the Limited
Entities that are requested to be included in such registration (Registrable
Securities that are so held being sometimes referred to herein as "Holder
Securities") in excess of the number of Company Securities to be sold in such
offering which, in the good faith view of such investment banking firm, can be
sold without adversely affecting such offering and the sale of the Other
Securities then contemplated (and (x) if such number is less than the full
number of such Holder Securities, such number shall be allocated by The
Limited among such Limited Entities and (y) in the event that such investment
banking firm advises that less than all of such Holder Securities may be
included in such offering, such Limited Entities may withdraw their request
for registration of their Registrable Securities under this Section 3.2 and 90
days subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be
effected as a registration under Section 3.1 to the extent permitted
thereunder), (iii) third, up to the full number of Registrable Securities held
by Holders (other than the Limited Entities) of Registrable Securities that
are requested to be included in such registration in excess of the number of
Company Securities and Holder Securities to be sold in such offering which, in
the good faith view of such investment banking firm, can be so sold without so
adversely affecting such offering (and (x) if such number is less than the
full number of such Registrable Securities, such number shall be allocated pro
rata among such Holders on the basis of the number of Registrable Securities
requested to be included therein by each such Holder and (y) in the event that
such investment banking firm advises that less than all of such Registrable
Securities may be included in such offering, such Holders may withdraw their
request for registration of their Registrable Securities under this Section
3.2 and 90 days subsequent to the effective date of the registration statement
for the registration of such Other Securities request that such registration
be effected as a registration under Section 3.1 to the extent permitted
thereunder), and (iv) fourth, up to the full number of the Other Securities
(other than Company Securities), if any, in excess of the number of Company
Securities and Registrable Securities to be sold in such offering which, in
the good faith view of such investment banking firm, can be so sold without so
adversely affecting such offering (and, if such number is less than the full
number of such Other Securities, such number shall be allocated pro rata among
the holders of such Other Securities (other than Company Securities) on the
basis of the number of securities requested to be included therein by each
such holder);
(c) if the registration referred to in the first sentence of
this Section 3.2 is to be an underwritten secondary registration on behalf of
holders of Other Securities (the "Other Holders"), and the lead underwriter or
managing underwriter advises Abercrombie & Fitch in writing that in their good
faith view, all or a part of such additional securities cannot be sold and the
inclusion of such additional securities in such registration would be likely to
have an adverse effect on the price, timing or distribution of the offering
and sale of the Other Securities then contemplated, Abercrombie & Fitch shall
include in such registration the number of securities (including Registrable
Securities) that such underwriters advise can be so sold without adversely
affecting such offering, allocated pro rata among the Other Holders and the
Holders of Registrable Securities on the basis of the number of securities
(including Registrable Securities) requested to be included therein by each
Other Holder and each Holder of Registrable Securities; provided, that if such
registration statement is to be filed at any time after the Limited Ownership
Reduction, if any, and if such Other Holders have requested that such
registration statement be filed pursuant to demand registration rights granted
to them by Abercrombie & Fitch, Abercrombie & Fitch shall include in such
registration (1) first, Other Securities sought to be included therein by the
Other Holders pursuant to the exercise of such demand registration rights, (2)
second, the number of Holder Securities sought to be included in such
registration in excess of the number of Other Securities sought to be included
in such registration by the Other Holders which in the good faith view of such
investment banking firm, can be so sold without so adversely affecting such
offering (and (x) if such number is less than the full number of such Holder
Securities, such number shall be allocated by The Limited among such Limited
Entities and (y) in the event that such investment banking firm advises that
less than all of such Holder Securities may be included in such offering, such
Limited Entities may withdraw their request for registration of their
Registrable Securities under this Section 3.2 and 90 days subsequent to the
effective date of the registration statement for the registration of such
Other Securities request that such registration be effected as a registration
under Section 3.1 to the extent permitted thereunder) and (3) third, the
number of Registrable Securities sought to be included in such registration by
Holders (other than the Limited Entities) of Registrable Securities in excess
of the number of Other Securities and the number of Holder Securities sought
to be included in such registration which, in the good faith view of such
investment banking firm, can be so sold without so adversely affecting such
offering (and (x) if such number is less than the full number of such
Registrable Securities, such number shall be allocated pro rata among such
Holders on the basis of the number of Registrable Securities requested to be
included therein by each such Holder and (y) in the event that such investment
banking firm advises that less than all of such Registrable Securities may be
included in such offering, such Holders may withdraw their request for
registration of their Registrable Securities under this Section 3.2 and 90
days subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be
effected as a registration under Section 3.l to the extent permitted
thereunder);
(d) Abercrombie & Fitch shall not be required to effect any
registration of Registrable Securities under this Section 3.2 incidental to
the registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend reinvestment
plans or stock option or other executive or employee benefit or compensation
plans; and
(e) no registration of Registrable Securities effected under
this Section 3.2 shall relieve Abercrombie & Fitch of its obligation to effect
a registration of Registrable Securities pursuant to Section 3.1.
3.3. Expenses. Except as provided herein, Abercrombie & Fitch
shall pay all Registration Expenses with respect to a particular offering (or
proposed offering). Notwithstanding the foregoing, each Holder and Abercrombie
& Fitch shall be responsible for its own internal administrative and similar
costs, which shall not constitute Registration Expenses.
3.4. Registration and Qualification. If and whenever
Abercrombie & Fitch is required to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 3.1 or 3.2,
Abercrombie & Fitch shall as promptly as practicable:
(a) prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities until the earlier of (A) such
time as all of such Registrable Securities have been disposed of in accordance
with the intended methods of disposition set forth in such registration
statement and (B) the expiration of six-months after such registration
statement becomes effective; provided, that such six-month period shall be
extended for such number of days that equals the number of days elapsing from
(x) the date the written notice contemplated by paragraph (f) below is given
by Abercrombie & Fitch to (y) the date on which Abercrombie & Fitch delivers
to the Holders of Registrable Securities the supplement or amendment
contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to
any underwriter of such Registrable Securities such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and any summary prospectus), in conformity with the requirements
of the Securities Act, such documents incorporated by reference in such
registration statement or prospectus, and such other documents, as the Holders
of Registrable Securities or such underwriter may reasonably request, and a
copy of any and all transmittal letters or other correspondence to or received
from, the SEC or any other governmental agency or self-regulatory body or
other body having jurisdiction (including any domestic or foreign securities
exchange) relating to such offering;
(d) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Holders of such
Registrable Securities or any underwriter to such Registrable Securities shall
request, and use its best efforts to obtain all appropriate registrations,
permits and consents in connection therewith, and do any and all other acts
and things which may be necessary or advisable to enable the Holders of
Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such
registration statement; provided, that Abercrombie & Fitch shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any such jurisdiction wherein it is not so qualified or to
consent to general service of process in any such jurisdiction;
(e) (i) use its best efforts to furnish to each Holder of
Registrable Securities included in such registration (each, a "Selling
Holder") and to any underwriter of such Registrable Securities an opinion of
counsel for Abercrombie & Fitch addressed to each Selling Holder and dated the
date of the closing under the underwriting agreement (if any) (or if such
offering is not underwritten, dated the effective date of the registration
statement), and (ii) use its best efforts to furnish to each Selling Holder a
"cold comfort" letter addressed to each Selling Holder and signed by the
independent public accountants who have audited the financial statements of
Abercrombie & Fitch included in such registration statement, in each such case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) as promptly as practicable, notify the Selling Holders in
writing (i) at any time when a prospectus relating to a registration pursuant
to Sections 3.1 or 3.2 is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) of any
request by the SEC or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement
or other document relating to such offering, and in either such case, at the
request of the Selling Holders prepare and furnish to the Selling Holders a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading:
(g) if reasonably requested by the lead or managing
underwriters, use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and automated
inter-dealer quotation system on which a class of common equity securities of
Abercrombie & Fitch is then listed;
(h) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Abercrombie & Fitch to attend any
"road shows" scheduled in connection with any such registration, with all
out-of-pocket costs and expense incurred by Abercrombie & Fitch or such
officers in connection with such attendance to be paid by Abercrombie & Fitch;
and
(i) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected
pursuant to Sections 3.1 or 3.2 unlegended certificates representing ownership
of the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters.
3.5. Conversion of Other Securities, Etc. In the event that
any Holder offers any options, rights, warrants or other securities issued by
it or any other Person that are offered with, convertible into or exercisable
or exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue
to be eligible for registration pursuant to Sections 3.1 and 3.2.
3.6. Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant
to a registration requested under this Article III, Abercrombie & Fitch shall
enter into an underwriting agreement with such underwriters for such offering,
which agreement will contain such representations and warranties by
Abercrombie & Fitch and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 3.7, and
agreements as to the provision of opinions of counsel and accountants' letters
to the effect and to the extent provided in Section 3.4(e). The Selling
Holders on whose behalf the Registrable Securities are to be distributed by
such underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of,
Abercrombie & Fitch to and for the benefit of such underwriters, shall also be
made to and for the benefit of such Selling Holders. Such underwriting
agreement shall also contain such representations and warranties by such
Selling Holders and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 3.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article III, Abercrombie & Fitch shall give the Holders
of such Registrable Securities and the underwriters, if any, and their
respective counsel and accountants, such reasonable and customary access to its
books and records and such opportunities to discuss the business of
Abercrombie & Fitch with its officers and the independent public accountants
who have certified the financial statements of Abercrombie & Fitch as shall be
necessary, in the opinion of such Holders and such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning
of the Securities Act; provided, that such Holders and the underwriters and
their respective counsel and accountants shall use their reasonable best
efforts to coordinate any such investigation of the books and records of
Abercrombie & Fitch and any such discussions with Abercrombie & Fitch's
officers and accountants so that all such investigations occur at the same
time and all such discussions occur at the same time.
3.7. Indemnification and Contribution. (a) In the case of
each offering of Registrable Securities made pursuant to this Article III,
Abercrombie & Fitch agrees to indemnify and hold harmless, to the extent
permitted by law, each Selling Holder, each underwriter of Registrable
Securities so offered and each Person, if any, who controls any of the
foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, against
any and all losses, liabilities, costs (including reasonable attorney's fees
and disbursements), claims and damages, joint or several, to which they or any
of them may become subject, under the Securities Act or otherwise, including
any amount paid in settlement of any litigation commenced or threatened,
insofar as such losses, liabilities, costs, claims and damages (or actions or
proceedings in respect thereof, whether or not such indemnified Person is a
party thereto) arise out of or are based upon any untrue statement by
Abercrombie & Fitch or alleged untrue statement by Abercrombie & Fitch of a
material fact contained in the registration statement (or in any preliminary
or final prospectus included therein) or in any offering memorandum or other
offering document relating to the offering and sale of such Registrable
Securities prepared by Abercrombie & Fitch or at its direction, or any
amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission by Abercrombie & Fitch or alleged omission
by Abercrombie & Fitch to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
that Abercrombie & Fitch shall not be liable to any Person in any such case to
the extent that any such loss, liability, cost, claim or damage arises out of
or relates to any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to a Selling Holder or another
holder of securities included in such registration statement furnished to
Abercrombie & Fitch by or on behalf of such Selling Holder, other holder or
underwriter, as the case may be, specifically for use in the registration
statement (or in any preliminary or final prospectus included therein),
offering memorandum or other offering document, or any amendment thereof or
supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Selling Holder or
any other holder and shall survive the transfer of such securities. The
foregoing indemnity agreement is in addition to any liability that Abercrombie
& Fitch may otherwise have to each Selling Holder, other holder or underwriter
of the Registrable Securities or any controlling person of the foregoing and
the officers, directors, affiliates, employees and agents of each of the
foregoing; provided, further, that, in the case of an offering with respect to
which a Selling Holder has designated the lead or managing underwriters (or a
Selling Holder is offering Registrable Securities directly, without an
underwriter), this indemnity does not apply to any loss, liability, cost,
claim or damage arising out of or relating to any untrue statement or alleged
untrue statement or omission or alleged omission in any preliminary prospectus
or offering memorandum if a copy of a final prospectus or offering memorandum
was not sent or given by or on behalf of any underwriter (or such Selling
Holder or other holder, as the case may be) to such Person asserting such
loss, liability, cost, claim or damage at or prior to the written confirmation
of the sale of the Registrable Securities as required by the Securities Act
and such untrue statement or omission had been corrected in such final
prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this
Agreement, each Selling Holder, by exercising its registration rights
hereunder, agrees to indemnify and hold harmless, and to cause each
underwriter of Registrable Securities included in such offering (in the same
manner and to the same extent as set forth in Section 3.7(a)) to agree to
indemnify and hold harmless, Abercrombie & Fitch, each other underwriter who
participates in such offering, each other Selling Holder or other holder with
securities included in such offering and in the case of an underwriter, such
Selling Holder or other holder, and each Person, if any, who controls any of
the foregoing within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, against
any and all losses, liabilities, costs, claims and damages to which they or
any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims and damages (or
actions or proceedings in respect thereof, whether or not such indemnified
Person is a party thereto) arise out of or are based upon any untrue statement
or alleged untrue statement by such Selling Holder or underwriter, as the case
may be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering
memorandum or other offering document relating to the offering and sale of
such Registrable Securities prepared by Abercrombie & Fitch or at its
direction, or any amendment thereof or supplement thereto, or any omission by
such Selling Holder or underwriter, as the case may be, or alleged omission by
such Selling Holder or underwriter, as the case may be, of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement of
a material fact is contained in, or such material fact is omitted from,
information relating to such Selling Holder or underwriter, as the case may
be, furnished to Abercrombie & Fitch by or on behalf of such Selling Holder or
underwriter, as the case may be, specifically for use in such registration
statement (or in any preliminary or final prospectus included therein),
offering memorandum or other offering document. The foregoing indemnity is in
addition to any liability which such Selling Holder or underwriter, as the
case may be, may otherwise have to Abercrombie & Fitch, or controlling persons
and the officers, directors, affiliates, employees, and agents of each of the
foregoing; provided, that, in the case of an offering made pursuant to this
Agreement with respect to which Abercrombie & Fitch has designated the lead or
managing underwriters (or Abercrombie & Fitch is offering securities directly,
without an underwriter), this indemnity does not apply to any loss, liability,
cost, claim, or damage arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
prospectus or offering memorandum if a copy of a final prospectus or offering
memorandum was not sent or given by or on behalf of any underwriter (or
Abercrombie & Fitch, as the case may be) to such Person asserting such loss,
liability, cost, claim or damage at or prior to the written confirmation of
the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such final prospectus
or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above
shall, promptly after receipt of notice of a claim or action against such
indemnified part in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided, that the
failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party on account of the indemnity
agreement contained in paragraph (a) or (b) above except to the extent that
the indemnifying party was actually prejudiced by such failure, and in no
event shall such failure relieve the indemnifying party from any other
liability that it may have to such indemnified party. If any such claim or
action shall be brought against an indemnified party, and it shall have
notified the indemnifying party thereof, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying
party shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 3.7 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. Any indemnifying party against whom indemnity may be sought
under this Section 3.7 shall not be liable to indemnify an indemnified party
if such indemnified party settles such claim or action without the consent of
the indemnifying party. The indemnifying party may not agree to any
settlement of any such claim or action, other than solely for monetary damages
for which the indemnifying party shall be responsible hereunder, the result of
which any remedy or relief shall be applied to or against the indemnified
party, without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld. In any action hereunder as to
which the indemnifying party has assumed the defense thereof with counsel
satisfactory to the indemnified party, the indemnified party shall continue to
be entitled to participate in the defense thereof, with counsel of its own
choice, but the indemnifying party shall not be obligated hereunder to
reimburse the indemnified party for the costs thereof.
(d) If the indemnification provided for in this Section 3.7
shall for any reason be unavailable (other than in accordance with its terms)
to an indemnified party in respect of any loss, liability, cost, claim or
damage referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, cost, claim or
damage (i) as between Abercrombie & Fitch and the Selling Holders on the one
hand and the underwriters on the other, in such proportion as shall be
appropriate to reflect the relative benefits received by Abercrombie & Fitch
and the Selling Holders on the one hand and the underwriters on the other hand
or, if such allocation is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits but also the
relative fault of Abercrombie & Fitch and the Selling Holders on the one hand
and the underwriters on the other with respect to the statements or omissions
which resulted in such loss, liability, cost, claim or damage as well as any
other relevant equitable considerations and (ii) as between Abercrombie &
Fitch on the one hand and each Selling Holder on the other, in such proportion
as is appropriate to reflect the relative fault of Abercrombie & Fitch and of
each Selling Holder in connection with such statements or omissions as well as
any other relevant equitable considerations. The relative benefits received
by Abercrombie & Fitch and the Selling Holders on the one hand and the
underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by Abercrombie & Fitch and
the Selling Holders bear to the total underwriting discounts and commissions
received by the underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of Abercrombie & Fitch and
the Selling Holders on the one hand and of the underwriters on the other shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by Abercrombie & Fitch and the
Selling Holders or by the underwriters. The relative fault of Abercrombie &
Fitch on the one hand and of each Selling Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, but not by reference to any
indemnified party's stock ownership in Abercrombie & Fitch. The amount paid
or payable by an indemnified party as a result of the loss, cost, claim,
damage or liability, or action in respect thereof, referred to above in this
paragraph (d) shall be deemed to include, for purposes of this paragraph (d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Abercrombie & Fitch and the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 3.7 were determined by
pro rata allocation (even if the underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this paragraph.
Notwithstanding any other provision of this Section 3.7, no Selling Holder
shall be required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities of such Selling Holder
were offered to the public exceeds the amount of any damages which such
Selling Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. Each Selling
Holder's obligations to contribute pursuant to this Section 3.7 are several in
proportion to the proceeds of the offering received by such Selling Holder
bears to the total proceeds of the offering received by all the Selling
Holders and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) Indemnification and contribution similar to that
specified in the preceding paragraphs of this Section 3.7 (with appropriate
modifications) shall be given by Abercrombie & Fitch, the Selling Holders and
underwriters with respect to any required registration or other qualification
of securities under any state law or regulation or governmental authority.
(f) The obligations of the parties under this Section 3.7
shall be in addition to any liability which any party may otherwise have to
any other party.
3.8. Rule 144 and Form S-3. Commencing 90 days after the
Initial Public Offering Date, Abercrombie & Fitch shall use its best efforts
to ensure that the conditions to the availability of Rule 144 set forth in
paragraph (c) thereof shall be satisfied. Upon the request of any Holder of
Registrable Securities, Abercrombie & Fitch will deliver to such Holder a
written statement as to whether it has complied with such requirements.
Abercrombie & Fitch further agrees to use its reasonable efforts to cause all
conditions to the availability of Form S-3 (or any successor form) under the
Securities Act of the filing of registration statements under this Agreement
to be met as soon as practicable after the Initial Public Offering Date.
Notwithstanding anything contained in this Section 3.8, Abercrombie & Fitch
may deregister under Section 12 of the Securities Exchange Act of 1934, as
amended, if it then is permitted to do so pursuant to said Act and the rules
and regulations thereunder.
3.9. Transfer of Registration Rights. Any Holder may transfer
all or any portion of its rights under Article III to any transferee of a
number of Registrable Securities owned by such Holder exceeding three percent
(3%) of the outstanding class or series of such securities at the time of
transfer (each transferee that receives such minimum number of Registrable
Securities, a "Transferee"); provided, that each Transferee of Registrable
Securities to which Registrable Securities are transferred, sold or assigned
directly by a Limited Entity (such Transferee, a "Limited Transferee"),
together with any Affiliate of such Limited Transferee (and any subsequent
direct or indirect Transferees of Registrable Securities from such Limited
Transferee and any Affiliates (other than the Limited Entities) thereof),
shall be entitled to request the registration of Registrable Securities
pursuant to Section 3.1 only once. Any transfer of registration rights
pursuant to this Section 3.9 shall be effective upon receipt by Abercrombie &
Fitch of (i) written notice from such Holder stating the name and address of
any Transferee and identifying the number of Registrable Securities with
respect to which the rights under this Agreement are being transferred and the
nature of the rights so transferred and (ii) a written agreement from such
Transferee to be bound by the terms of this Article III and Sections 5.3, 5.4,
5.9, 5.10, and 5.11 of this Agreement. The Holders may exercise their rights
hereunder in such priority as they shall agree upon among themselves.
3.10. Holdback Agreement. If any registration pursuant to
this Article III shall be in connection with an underwritten public offering
of Registrable Securities, each Selling Holder agrees not to effect any public
sale or distribution, including any sale under Rule 144, of any equity
security of Abercrombie & Fitch (otherwise than through the registered public
offering then being made), within 7 days prior to or 90 days (or such lesser
period as the lead or managing underwriters may permit) after the effective
date of the registration statement (or the commencement of the offering to the
public of such Registrable Securities in the case of Rule 415 offerings).
Abercrombie & Fitch hereby also so agrees and agrees to cause each other
holder of equity securities or securities convertible into or exchangeable or
exercisable for such securities (other than in the case of equity securities,
under dividend reinvestment plans or employee stock plans) purchased from
Abercrombie & Fitch otherwise than in a public offering to so agree.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
4.1. No Violations. (a) For so long as the Ownership
Percentage is equal to or greater than 50%, Abercrombie & Fitch covenants and
agrees that it will not take any action or enter into any commitment or
agreement which may reasonably be anticipated to result, with or without
notice and with or without lapse of time or otherwise, in a contravention or
event of default by any Limited Entity of (i) any provisions of applicable law
or regulation, including but not limited to provisions pertaining to the
Internal Revenue Code of 1986, as amended, or the Employee Retirement Income
Security Act of 1974, as amended, (ii) any provision of The Limited's
certificate of incorporation or bylaws, (iii) any credit agreement or other
material instrument binding upon The Limited, or (iv) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over The
Limited or any of their respective assets.
(b) Abercrombie & Fitch and The Limited agree to provide to
the other any information and documentation requested by the other for the
purpose of evaluating and ensuring compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and 4.1(b),
nothing in this Agreement is intended to limit or restrict in any way the
ability of The Limited to effect, restrict or limit any action or proposed
action of Abercrombie & Fitch, including, but not limited to, the incurrence
by Abercrombie & Fitch of indebtedness, based upon The Limited's internal
policies or other factors.
ARTICLE V
MISCELLANEOUS
5.1. Limitation of Liability. Neither The Limited nor
Abercrombie & Fitch shall be liable to the other for any special, indirect,
incidental or consequential damages of the other arising in connection with
this Agreement.
5.2. Subsidiaries. The Limited agrees and acknowledges that
The Limited shall be responsible for the performance by each Limited Entity of
the obligations hereunder applicable to such Limited Entity.
5.3. Amendments. This Agreement may not be amended or
terminated orally, but only by a writing duly executed by or on behalf of the
parties hereto. Any such amendment shall be validly and sufficiently
authorized for purposes of this Agreement if it is signed on behalf of The
Limited and Abercrombie & Fitch by any of their respective presidents or vice
presidents.
5.4. Term. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to
Persons other than Transferees; provided, that the provisions of Section 3.7
shall survive any such expiration.
5.5. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other
than those to which it is so determined to be invalid, illegal or
unenforceable, shall remain in full force and effect to the fullest extent
permitted by law and shall not be affected thereby, unless such a construction
would be unreasonable.
5.6 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon
actual receipt, and shall be delivered (a) in person, (b) by registered or
certified mail, postage prepaid, return receipt requested, or (c) by facsimile
or other generally accepted means of electronic transmission (provided that a
copy of any notice delivered pursuant to this clause (c) shall also be sent
pursuant to clause (b), addressed as follows:
(a) If to Abercrombie & Fitch, to:
Abercrombie & Fitch, Inc.
Four Limited Parkway
Reynoldsburg, OH 43068
Attention: Samuel P. Fried
Fax: 614-479-7188
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Columbus, OH 43230
Attention: Samuel P. Fried
Fax: 614-479-7188
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Jeffrey Small
Fax: 212-450-4800
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
5.7. Further Assurances. The Limited and Abercrombie & Fitch
shall execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such instruments and take such other action as may be necessary
or advisable to carry out their obligations under this Agreement and under any
exhibit, document or other instrument delivered pursuant hereto.
5.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute but one and the same agreement.
5.9. Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by,
the laws of the State of New York.
5.10. Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
5.11. Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns. Nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity any benefits,
rights or remedies.
5.12. Specific Performance. The parties hereto acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that
they shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States
or any state thereof, in addition to any other remedy to which they may be
entitled at law or equity.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
ABERCROMBIE & FITCH CO.
By:__________________________
Name:
Title:
THE LIMITED, INC.
By:__________________________
Name:
Title: